2. Report of the International Task Force for Assessing the Baia Mare Accident (December 2000) pp. 4–5.

3. Mineral Policy Institute, et al., EU Releases Report on Cyanide Disaster, available at http://www.zpok.hu/cyanide/baiamare/News/mining.htm.

4. Ibid.

5. Report of the International Task Force for Assessing the Baia Mare Accident (December 2000) p. 14.

6. Idem, at p. 11. According to Greenpeace, the spill ‘killed virtually all life’ in the Tisa. See Greenpeace, The Real Face of the Kangaroo, A Fact-finding Tour to the AURUL S.A. Gold Mining Enterprise in Baia Mare, Romania, and Along the Lapus-Somes-Tisza River System in Romania and Hungary (March 2000) p. 3.

7. ‘Europe Environment: Hungary Demands Euro 113 Million for Danube Cyanide Polllution Damages’, Europe Environment 18 July 2000, p. 1; ‘Europe Environment: Hungary Demands EUR 113 M for Danube Cyanide Pollution Damages from Esmeralda Explorations’, Europe Environment 4 August 2000.

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17. Ibid.

18. Cf., Waelde, T. and Kolo, A., ‘Environmental Regulation, Investment Protection and “Regulatory Taking” in International Law’, 50 ICLQ (2001) p. 811.CrossRefGoogle Scholar

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20. World Investment Report 2001, p. 1.

21. Ibid.

22. UNCTAD Press Release, ‘Global Foreign Direct Investment to Exceed $1 Trillion, UNCTAD Predicts’ (TAD/INF/2856), 3 October 2000, p. 2. See also OECD, Recent Trends in Foreign Direct Investment (Paris, OECD 2000) p. 1; S. Thomsen, ‘Investment Patterns in a Longer-Term Perspective’ (OECD Working Papers on International Investment No. 2000/2) (April 2000) p. 1 at pp. 5–6.

23. UNCTAD Press Release, ‘Global Foreign Direct Investment to Exceed $1 Trillion, UNCTAD Predicts’ (TAD/INF/2856), 3 October 2000, p. 4.

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29. World Investment Report 2000, p. 9.

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36. Idem, at p. 6.

37. Ibid.

38. World Investment Report 2000.

39. Ibid. See also World Investment Report 2001, p. 5.

40. E.g., the Reformulated Gasoline case (United States - Standards for Reformulated and Conventional Gasoline, 35 ILM (1996) p. 274) was a dispute between the US on the one hand and Venezuela and Brazil, on the other. The Shrimp-Turtle case (United States - Import Prohibition of Certain Shrimp and Shrimp Products, Appellate Body Report, WT/DS58/AB/R) involved the US on one hand and India, Pakistan, Thailand and Malaysia, on the other.Google Scholar

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43. But WTO dispute settlement procedures may be invoked to manage the situation.

44. Shaffer, G.C., “The World Trade Organization under Challenge: Democracy and the Law and Politics of the WTO's Treatment of Trade and Environment Matters’, 25 Harv. Emironmenal L Rev. (2001) p. 1; Schoenbaum, loc. cit. n. 14, at p. 268; French, loc. cit. n. 14, at p. 1;Google ScholarSteinberg, R.H., ‘Trade-Environment Negotiations in the EU, NAFTA and WTO: Regional Trajectories of Rule Development’, 91 AJIL (1997) p. 231.CrossRefGoogle Scholar

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46. In United Stales-Restrictions on Imports of Tuna, 33 ILM (1994) p. 839, the GATT Panel explicitly recognised the imperative of sustainable development and the need to balance it with the goals of free trade.Google Scholar

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50. Idem, at p. 48.

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56. OECD, supra n. 16, at p. 5.

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60. Ibid. E.g., the sale of pollution abatement equipment and related services have been rising.

61. Idem, at p. 13.

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72. Such a scenario is more likely to happen in a developed country rather than a developing country.

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85. Ibid, and pp. 261–263.

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87. Waelde, and Ndi, , loc. cit. n. 83, at pp. 234 and 236.Google Scholar

88. Idem, at p. 264.

89. See generally, Lowry, J. and Edmunds, R., eds., Environmental Protection and the Common Law (Oxford, Hart 2000).Google Scholar

90. Waelde, T. and Dow, S., ‘Treaties and Regulatory Risk in Infrastructure Investment’, 34 J World Trade (2000) p. 1 at pp. 4–5.CrossRefGoogle Scholar

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94. Idem, at p. 332.

95. Idem, at p. 338.

96. ‘States have become more active in the fields of conservation and environmental control, and often, where the measure has been shown indeed to be in the public interest, it has been held that no compensation is due. In other words, “just” compensation has in some cases been treated as equal to zero when the purpose is clearly to promote the public good.’ Higgins, R., ‘The Taking of Property by the State’, 176 Recueil des Cours (1982–III) p.267 at p. 277.Google Scholar

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98. 9 Iran-US Claims Tribunal Rep. (1985–II) p. 248.

99. 23 Iran-US Claims Tribunal Rep. (1989–II) p. 378.

100. G.H., Aldrich, ‘What Constitutes a Compensable Taking of Property? The Decisions of the Iran-United States Claims Tribunal’, 88 AJIL (1994) p. 585Google Scholar at p. 609. See also Brower, C.N. and Brueschke, J.D., The Iran-United States Claims Tribunal (The Hague, Martinus Nijhoff 1998) pp. 463–466.Google Scholar

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103. At any rate, it is recognised that states have a wide discretion in determining what is in their national interests. See, e.g., Waelde and Kolo, loc. cit. n. 18 at p. 828; Stanley, J.A., ‘Keeping Big Brother out of our Backyard: Regulatory Takings as Defined in International Law and Compared to American Fifth Amendment Jurisprudence’, 15 Emory ILR (2001) p. 349 at p. 372.Google Scholar

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105. ‘Regulatory functions are a matter of sovereign right of the host state and there could be no right in international law to compensation or diplomatic protection in respect of such intereferences.’ Somarajah, op. cit. n. 80, at pp. 299–300. See also Mouri, A., The International Law of Expropriation as Reflected in the Work of the Iran-US Claims Tribunal (Dordrecht, Martinus Nijhoff 1994) p. 248Google Scholar; Comeaux and Kinsella, op. cit. n. 80, at p. 10; Wortley, B.A., Expropriation in Public International Law (Cambridge, Cambridge University Press 1959) pp. 50–52Google Scholar; Ganguly, S., ‘The Investor-State Dispute Mechanism (ISDM) a Sovereign’s Power to Protect Public Health’, 31 Columbia J Trans. L (1999) p. 113 at p. 138; Stanley, loc. cit. n. 103, at p. 371.Google Scholar

106. E.g., Comeaux and Kinsella, op. cit. n. 80, at pp. 10–11; Soloway, J.A., ‘NAFTA’s Chapter 11, The Challenge of Private Party Participation’, 16 J Int. Arb. (1999) p. 1 at pp. 7–10; Wortley, op. cit. n. 105, at p. 51.Google Scholar

107. Stanley, , loc. cit. n. 103, at p. 349.Google Scholar

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109. Waelde, and Kolo, , loc. cit. n. 18, at p. 844.Google Scholar

110. Ibid.

111. 116 ILR p. 1, para. 104.Google Scholar

112. Supra n. 96 and accompanying text.

113. Sornarajah, , op. cit. n. 80, at p. 283.Google Scholar

114. For a forceful argument for this position, see Wagner, J. M., ‘International Investment, Expropriation and Environmental Protection’, 29 Golden Gate UL Rev. (1999) p. 465.Google Scholar

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119. E.g., Ethyl Corporation v. Canada; Pope & Talbot Inc. v. Government of Canada; Sun Belt Water, Inc. v. Canada; United Parcel Service of America, Inc. v. Government of Canada.

120. E.g., Metalclad Corporation v. United Mexican States, 40 ILM (2001) p. 36Google Scholar; Azinian & Ors v. United Mexican States, 39 ILM (2000) p. 53; Pope & Talbot Inc. v. Government of Canada; Sun Belt Water, Inc. v. Canada; United Parcel Service of America, Inc. v. Government of Canada.Google Scholar

121. E.g., Ethyl Corporation v. Canada; S.D. Myers, Inc. v. Government of Canada.

122. E.g., Azinian & Ors v. United Mexican States, 39 ILM (2000) p. 537.Google Scholar

123. 40 ILM (2001) p. 36Google Scholar. For general commentary, Kass, S.L. and McCarroll, J.M., ‘The “Metalclad” Decision under NAFTA’s Chapter 11’, New York LJ 27 10 2000, p. 1.Google Scholar

124. Assessments were made by the Autonomous University of SLP and by the Mexican Federal Attorney’s Office for the Protection of the Environment. See idem, at pp. 42–43.

125. It is not reported yet but the Parital Award and other documents can be found at the official website of Canada’s Department of Foreign Affairs and International Trade: http://www.dfat-maeci.gc.ca/tna-nac/.

126. The ban covered only the period from 20 November 1995 to February 1997. When the ban was lifted, the claimant was able to import PCBs from Canada into the US. However, this lasted for only five months, as a decision of the Ninth Circuit of the US Court of Appeals, made it illegal for the trade to continue. See paras. 127–128 of the Partial Award of 13 November 2000.

127. See the Interim Order of 20 November 1995, which is reprinted at para. 123 of the Partial Award. See also paras. 125–126 and 184–185.

128. Indeed, on a number of occasions, the Minister had made statements to the effect that PCBs should be handled in Canada by Canadians. See, e.g., paras. 171 and 178 of the Partial Award.

129. See para. 164 of the Partial Award.

130. Idem, at paras. 165–166.

131. E.g., paras. 173 and 176.

132. Idem, at para. 112.

133. Para. 195 of the Partial Award.

134. This aspect of the case is explained better in the Separate Opinion of Bryan Schwartz, at para. 18.

135. See para. 162 of the Partial Award.

136. Kass, and McCarroll, , loc. cit. n. 123, at p. 1, 4.Google Scholar

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138. See paras. 18 and 47.

139. See para. 18 of the Statement of Claim, which is available at http://www.dfait-maect.gc.ca/tna-nac/Min.

140. Idem, at para. 14.

141. Para. 77 of the Partial Award.

142. See in particular paras. 67–70 of the Statement of Defence, also available at http://www.dfait-maect.gc.ca/tna-nac/Min.

143. Statement of Claim, Statement of Defence and the Preliminary Award are available at http://www.dfait-maect.gc.ca/tna-nac/Min.

144. See Statement of Claim.

145. Para. 38 of the Statement of Defence.

146. Idem, at para. 51.

147. Idem, at paras. 53–54.

148. ‘Even a small release of gasoline containing MTBE can have significant adverse effects.’ Idem, at para. 61. For a more detailed background, see Dhooge, L.J., ‘The Revenge of the Trail Smelter: Environmental Regulation as Expropriation Pursuant to the North American Free Trade Agreement’, 38 American Business LJ (2001) p. 475.CrossRefGoogle Scholar

149. See generally, Swan, A.C., ‘Ethyl Corporation v. Canada, Award on Jurisdiction (under NAFTA/ UNCITRAL)’, 94 AJIL (2000) p. 159CrossRefGoogle Scholar; Werner, J., ‘Arbitration of Investment Disputes: The First NAFTA Award’, 16 J Int. Arb. (1999) p. 139.Google Scholar

150. On 15 January 2001, the Tribunal handed down a decision on Petitions from Third Persons to Intervene as ‘Amici Curiae’. This is also available at http://www.dfait-maect.gc.ca/tna-nac/Min.

151. Baumgartner, C., ‘The Demise of the Multilateral Agreement on Investment’, Col. J Int. Envtl. L & Pol’y (1998)p. 40 at p. 46.Google Scholar

152. But others have postulated that Canada settled not so much because of fear of losing, but because of the sheer cost of litigation. See, e.g., Byrne, J., ‘NAFTA Dispute Resolution: Implementing True Rule-Based Diplomacy Through Direct Access’, 35 Texas ILJ (2000) p. 415Google Scholar at p. 427. However, the logic of this argument is suspect because a successful party to an arbitration is entitled to recover its legal costs. Thus a party which is convinced of the strength of its case is not likely to settle merely because of the potential cost of the litigation. This is even stronger when one is looking at a state rather than an individual.

153. Eastman, loc. cit. n. 118, at p. 110; Soloway, loc. cit. n. 106, at p. 5.

154. Eastman, loc. cit. n. 118, at p. 110. See also De Pencier, loc. cit. n. 118, at p. 414.

155. It should be noted that in the Ethyl case, too, the credibility of scientific evidence was at issue. But in the settlement reached with the US corporation, Canada cited the lack of scientific evidence as justifying its decision to settle. Some have, therefore, questioned the environmenal credentials of the Ethyl case. See, e.g., Soloway, loc. cit. n. 118, at pp. 58 and 95; De Pencier, loc. cit. n. 118, at p. 418.

156. Para. 8(a) of the Statement of Claim.

157. Esp. paras. 51 and 74 of the Statement of Defence.

158. Para. 9 of the Statement of Claim.

159. In particular para. 8(c) of the Statement of Claim.

160. See in particular paras. 2, 3, 12 and 13 of the Statement of Claim.

161. Para. 2 of the Statement of Defence.

162. Verhoosel, loc. cit. n. 68, at p. 463.

163. E.g., Art. 1114. Cf., Arts. 19 and 24(2) of the Energy Charter Treaty 1994. The Treaty is reprinted at 33 ILM (1995) p. 360Google Scholar. See generally, Walde, T.W., ‘International Investment under the 1994 Energy Charter Treaty: Legal, Negotiating and Policy Implications for International Investors within Western and Commonwealth of Independent States/Eastern European Countries’, 29 J World Trade (1995) p. 5.Google Scholar

164. The North American Agreement on Environmental Cooperation (NAAEC). See generally, Moreno, et al., loc. cit. n. 68, at p. 405; Wagner, loc. cit. n. 114, at pp. 478–480; Johnson, P.M. and Beaulieu, A., The Environment and NAFTA, Understanding and Implementing the New Continental Law (Washington, DC, Island Press 1996).Google Scholar

165. Separate Opinion o f Dr Bryan Schwartz in the S.D. Myers Award of 12 November 2000 at para. 25.

166. Mann, and Von, Moltke, supra n. 55, at pp. 4 and 6.Google Scholar

167. Mann, and Von, Moltke, supra n. 55, esp. at pp. 6–7.Google Scholar

168. See Separate Opinion of Dr Bryan Schwartz, in the S.D. Myers Award of 12 November 2000 at paras. 92 and 118.